Gold prices dropped significantly, helped by the increase in risk appetite and strengthening of the US dollar after the first of the three TV US presidency debates.
Investors say that Democratic candidate Clinton won the debate with Republican Donald Trump. The markets believe that Clinton’s victory in the elections will mean maintaining the status quo. In general, the debate have reduced the demand for gold, which is often seen as an alternative investment in times of geopolitical and financial uncertainty.
Meanwhile, the US Dollar Index, showing the US dollar against a basket of six major currencies, was up 0.35%. Since gold prices are tied to the dollar, a stronger dollar makes the precious metal more expensive for holders of foreign currencies.
Additionally, investors await the Fed’s statement hoping to hear comments about the prospects for a rate hike before the end of this year. According to the futures market, the likelihood of tighter monetary policy in December is 52.0%. Higher interest rates tend to have a downward pressure on gold.
The cost of the October futures for gold on the COMEX fell to $ 1325.9 per ounce.
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